U.S. regulators charged Volkswagen and former CEO Martin Winterkorn with defrauding investors during its massive diesel emissions scandal.
The charges from the U.S. Securities and Exchange Commission come two years after the German automaker settled with the U.S. over criminal and civil charges, as the company tries to distance itself from one if its darkest eras.
The SEC said that between April 2014 and May 2015, Volkswagen issued more than $13 billion in bonds and asset-backed securities in U.S. markets when senior executives knew that more than 500,000 vehicles in the country grossly exceeded legal vehicle emissions limits.
Volkswagen made false and misleading statements to investors and underwriters about vehicle quality, environmental compliance, and the company's financial standing, which gave Volkswagen a financial benefit when it issued securities at more attractive rates for the company, according to the SEC.
"Volkswagen hid its decade-long emissions scheme while it was selling billions of dollars of its bonds to investors at inflated prices," said Stephanie Avakian, co-director of the SEC's enforcement division.
In September 2015 Volkswagen installed software on more than 475,000 cars that enabled them to cheat on emissions tests, according to the Environmental Protection Agency. The software reduced nitrogen oxide emissions when the cars were placed on a test machine but allowed higher emissions and improved engine performance during normal driving.
In 2016 the Justice Department sued Volkswagen over the emissions-cheating software and the Federal Trade Commission sued the company, saying it made false claims in commercials promoting its "Clean Diesel" vehicles as environmentally friendly.
Winterkorn resigned saying he took responsibility for the fraud, but insisted he personally did nothing wrong.
The SEC said that he did in the complaint filed Thursday.
Volkswagen did not immediately respond Friday to requests for comment from The Associated Press, but told the German dpa news agency that the SEC is simply repeating unsubstantiated claims against Winterkorn, who was not involved in any sales of bonds.
The company has paid some $20 billion in fines and civil settlements. It has also pleaded guilty to criminal charges in the United States and several managers, including Winterkorn, were charged there.
The surprise charges from the SEC arrive as the German company attempts to distance itself from the scandal. On Tuesday the automaker said that it planned to ramp up production of electric vehicles over the next ten years, to 22 million, and reduce its carbon footprint over vehicle life cycles by 30 percent.
Volkswagen's pivot to electric vehicles comes as it seeks to comply with new limits on carbon dioxide emissions in Europe, and a push by China for more low-emission vehicles.
The SEC's complaint, filed in the U.S. District Court for the Northern District of California, charges Volkswagen AG, its subsidiaries Volkswagen Group of America Finance, LLC and VW Credit, Inc., and Winterkorn with violating the antifraud provisions of the federal securities laws.
The SEC seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest and civil penalties. It also wants to bar Winterkorn from holding any corporate officer or director positions.
WASHINGTON (AP) — Israel this week briefed Biden administration officials on a plan to evacuate Palestinian civilians ahead of a potential operation in the southern Gaza city of Rafah aimed at rooting out Hamas militants, according to U.S. officials familiar with the talks.
The officials, who were not authorized to comment publicly and requested anonymity to speak about the sensitive exchange, said that the plan detailed by the Israelis did not change the U.S. administration’s view that moving forward with an operation in Rafah would put too many innocent Palestinian civilians at risk.
Israeli Prime Minister Benjamin Netanyahu has vowed to carry out a military operation in Rafah despite warnings from President Joe Biden and other western officials that doing so would result in more civilian deaths and worsen an already dire humanitarian crisis.
The Biden administration has said there could be consequences for Israel should it move forward with the operation without a credible plan to safeguard civilians.
“Absent such a plan, we can’t support a major military operation going into Rafah because the damage it would do is beyond what’s acceptable,” U.S. Secretary of State Antony Blinken said late Friday at the Sedona Forum, an event in Arizona hosted by the McCain Institute.
Some 1.5 million Palestinians have sheltered in the southern Gaza city as the territory has been ravaged by the war that began on Oct. 7 after Hamas militants attacked Israel, killing 1,200 people and taking about 250 hostages.
The United Nations humanitarian aid agency on Friday said that hundreds of thousands of people would be “at imminent risk of death” if Israel moves forward with the Rafah assault. The border city is a critical entry point for humanitarian aid and is filled with displaced Palestinians, many in densely packed tent camps.
The officials added that the evacuation plan that the Israelis briefed was not finalized and both sides agreed to keep discussing the matter.
White House press secretary Karine Jean-Pierre told reporters on Friday that no “comprehensive” plan for a potential Rafah operation has been revealed by the Israelis to the White House. The operation, however, has been discussed during recent calls between Biden and Netanyahu as well as during recent virtual talks with top Israeli and U.S. national security officials.
“We want to make sure that those conversations continue because it is important to protect those Palestinian lives — those innocent lives,” Jean-Pierre said.
The revelation of Israel's continued push to carry out a Rafah operation came as CIA director William Burns arrived Friday in Egypt, where negotiators are trying to seal a cease-fire accord between Israel and Hamas.
Hamas is considering the latest proposal for a cease-fire and hostage release put forward by U.S., Egyptian and Qatari mediators, who are looking to avert the Rafah operation.
They have publicly pressed Hamas to accept the terms of the deal that would lead to an extended cease-fire and an exchange of Israeli hostages taken captive on Oct. 7 and Palestinian prisoners in Israeli jails.
Hamas has said it will send a delegation to Cairo in the coming days for further discussions on the offer, though it has not specified when.
Israel, and its allies, have sought to increase pressure on Hamas on the hostage negotiation. Signaling that Israel continues to move forward with its planning for a Rafah operation could be a tactic to nudge the militants to finalize the deal.
Netanyahu said earlier this week that Israeli forces would enter Rafah, which Israel says is Hamas’ last stronghold, regardless of whether a truce-for-hostages deal is struck. His comments appeared to be meant to appease his nationalist governing partners, and it was not clear whether they would have any bearing on any emerging deal with Hamas.
Blinken visited the region, including Israel, this week and called the latest proposal “extraordinarily generous” and said “the time to act is now.”
In Arizona on Friday, Blinken repeated remarks he made earlier this week that "the only thing standing between the people of Gaza and a cease-fire is Hamas.”
President Joe Biden walks across the South Lawn of the White House as he talks with White House press secretary Karine Jean-Pierre Thursday, May 2, 2024, in Washington, after returning from a trip to North Carolina. (AP Photo/Mark Schiefelbein)
